There's a lady who's sure All that glitters is gold And she's buying a stairway to heaven

When she gets there she knows If the stores are all closed With a word she can get what she came for

Ooh, ooh, ooh, ooh, oohAnd she's buying a stairway to heaven

Led Zeppelin – Stairway to Heaven

She was buying the stairway to heaven using her home equity line, but now that she is underwater on her mortgage she tried to pay using her Amex card, but her credit score had dropped to 600 and they cut her credit line in half. The stairway to heaven isn’t as easy to achieve as it used to be. Barney Frank and Nancy Pelosi feel bad for the lady. They are going to borrow against your children’s future tax dollars and give them to the lady, so she can buy that stairway to heaven. By making this deal with the devil, the corrupt politicians running this country have put us on an escalator to hell. A straight shooting blunt President from last century described what would destroy America.

The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get rich quick theory of life.

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Theodore Roosevelt

Over the last 30 years Americans have learned to love soft living and fallen for the lie of prosperity at any price. In the last 10 years, a significant number of delusional citizens have tested the get rich quick theory of life, twice. First, the internet bubble lured millions to believe that Pets.com was going to change the world and day trading was a road to riches. Once this bubble collapsed and wiped out millions of morons we moved onto the next bubble. Millions of Americans bought into the “fact” that home prices only go up. The National Association of Realtors dealt the propaganda that now was the best time to buy. Alan Greenspan provided the fuel with 1% interest rates and recommending ARMs for everyone. Banks and mortgage brokers provided the mortgage products that would allow someone with annual income of $25,000 to “buy” a $400,000 home. George Bush and Congress stood on the sidelines cheering everyone on.

The get rich quick portion of our population (10% to 20%) began to buy multiple houses and flipping them before the ink was dry on the closing papers. Home prices doubled in many places in the space of a few years. This lured a vast amount of the population to borrow against the ever increasing value of their homes. Everyone knew that home prices never fall.

Well on his way, his head in a cloud,The man of a thousand voices, talking perfectly loud.But nobody ever hears him,Or the sound he appears to make.And he never seems to notice .....

But the fool on the hillSees the sun going down.And the eyes in his head,See the world spinning around.

The Beatles – Fool on the Hill

During the period of 2000 through 2008, I felt like the fool on the hill. I never bought an internet stock and couldn’t understand how people were getting rich buying and selling these stocks. I didn’t flip any condos, didn’t borrow against the equity of the house I’ve lived in since 1995, or buy a new BMW. None of the hype and enthusiasm made any sense to me, so I sat on the hill and watched the sun going down. Instead of having the satisfaction of making the right choices, my government is telling me that I should have joined the party. They are taking my money and handing it to the people who made wrong choices. Corrupted politicians, government bureaucrats and lying financial pundits are breathlessly awaiting the return of irrational exuberance. They believe that the American consumer just needs a little confidence to resume their rightful place in the world economic pyramid.

I hate to be a wet blanket, but the American consumer isn’t coming back and the consequences of this fact have yet to be realized by the financial markets, foreign manufacturers, domestic retailers or politicians. The overhang of debt, continued home price depreciation, lack of savings, and aging of America will change the face of retailing for decades.

Why Worry?

The Consumer Confidence Index in February was 25, the lowest since the index inception in 1967. During the Dot.com bubble it reached an irrationally exuberant 140. It hovered in the 110 level through the housing bubble until late 2007. The good news is that it can’t go below zero. The CNBC pundits and Washington politicians think that Americans just need to get their confidence back and everything will be OK. There’s only one problem. You can’t spend confidence.

James Quinn is a senior director of strategic planning for a major university.
James has held financial positions with a retailer, homebuilder and university in his 22-year career. Those positions included treasurer, controller, and head of (more...)